Income tax return, Engineering Mathematics

Assignment Help:

Below are items that affected the 2011 accounting records for Darwin Adaptions Inc. The annual accounting period ended December 31, 2011. No adjusting entries were made during the year.

Required:

In proper form, prepare any necessary adjusting journal necessary at December 31, 2011. Only answers appearing on page 4 will be graded. If no entry is required write "no entry required"

a) Darwin's attorney has provided the following summaries of three lawsuits against Darwin at December 31, 2011:

•Lawsuit A: The loss is probable and the estimated loss is $50,000.
•Lawsuit B: The loss is probable, but the loss cannot be reasonably estimated.
•Lawsuit C: The loss is reasonably possible and the estimated loss is $15,000.

b) On January 1, 2010 Darwin purchased a patent for $420,000 from an inventor who had developed a new manufacturing process. At the time of the purchase, the patent had a remaining useful life of 10 years. On December 31, 2011, Darwin concluded that the estimated future cash flows from the patent were $250,000. The patent's estimated fair value on December 31, 2011 was $200,000.

c) The following information relates to the five major inventory items at December 31, 2011:
Item Quantity Unit Cost Replacement Cost
A 100 $40 $35
B 150 $50 $52
C 25 $60 $62
D 200 $15 $12
Darwin applies the lower of cost or market rule to individual items.

d) Darwin had unpaid wages of $35,000 on December 31, 2011. The FICA tax rate was 7.65% and the no employees had reached the maximum.

e) On 6/30/10 Darwinborrowed $36,730. The note specified four equal annual payments of $10,000 beginning 6/30/11. The interest rate on the note was 6%.

f) Darwin's 2011 net income before tax was $180,000 after all adjustments. The income tax return included additional depreciation of $20,000. The 2011 tax rate was 35%.

Balance Sheet

December 31, 2011 and 2010

 

Assets







2011

2010

Current assets








 Cash







$566,579

$783,275

 Accounts receivable, less allowance of 2011 $20,282; 2010 $16,463

731,163

655,059

 Inventory






1,605,563

1,578,118

 Prepaid expenses






260,893

166,542

   Total current assets





3,164,198

3,182,994

Noncurrent assets








  Buildings and Equipment, less accumulated depreciation 2011



         $5,191,984; 2010 $3,246,789




18,254,292

17,131,938

  Land







156,000

156,000

  Investment






527,132

500,000

  Intangible assets






251,600

222,845

     Total assets






$22,353,222

$21,193,777










Liabilities








Current liabilities








  Trade accounts payable





1,118,690

942,158

  Accrued expenses






775,473

655,142

  Interest payable






299,678

232,516

  Deferred revenue






359,058

337,286

Total current liabilities





2,552,899

2,167,102

Noncurrent liabilities







Bonds payable






8,850,760

8,750,704

    Total liabilities






11,403,659

10,917,806










Stockholders' Equity







  Common stock ($1 par value)





210,000

200,000

  Additional paid-in-capital





9,239,423

9,109,423

  Retained earnings






1,500,140

966,548

     Total liabilities and stockholder's equity



$22,353,222

$21,193,777

 


Related Discussions:- Income tax return

Jacobian, if u=x^2-2y^2, v=2x^2-y^2 and x=rcosp ad y=rsinp, find the value ...

if u=x^2-2y^2, v=2x^2-y^2 and x=rcosp ad y=rsinp, find the value of the jacobian d(u,v)/d(r,p)

11, y''(x)=2*10^-6*y(x)(100000-y(x))

y''(x)=2*10^-6*y(x)(100000-y(x))

Determine the missing entries, Determine the missing entries in the followi...

Determine the missing entries in the following divided difference table and use the result to estimate f(1/2).

Temperature function, If a temperature function is given in the x,y plane b...

If a temperature function is given in the x,y plane by T(x,y) = x+y, what is the value, to 3 decimal places, of the corresponding temperature function T1(u,v) at the point (u,v) =

Dot plot graph, What does a dot plot graph look like with the measurements ...

What does a dot plot graph look like with the measurements 85.1 mm,85.0 mm,85.2 mm, and 85.1 mm

Mann''s test for the weibull distribution, How do i perform mann''s test fo...

How do i perform mann''s test for the weibull distribution

., parabola

parabola

Linear programming applications to industry, I need a research paper. The c...

I need a research paper. The concept is to develop a new linear programming was not introduced in the art literature before then apply the LP to spcific industry

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd